Difference between crypto coins and tokens

Difference between crypto coins and tokens

Crypto currencies can roughly be split into two categories: coins and tokens. The difference between them is simple. Coins have their own native blockchain, like Bitcoin, for example. Ether (ETH) has the Ethereumblockchain. Coins typically have a specific utility over the whole network, like paying for transaction fees, staking, or taking part in governance.

Tokens are built on pre-existing blockchains. They might have some similar roles to coins, but tokens mainly have utility in their own projects. One example is PancakeSwap's CAKE on Binance Smart Chain. You can also use it to pay for certain transactions in the PancakeSwap ecosystem, like minting Non-Fungible Tokens or playing their lottery. However, CAKE doesn’t have its own blockchain, so it cant be used in every application across BSC. The same is true for the thousands of ERC-20 tokens issued on the Ethereumblockchain. Each token is part of a specific project with different use cases



Creating crypto coins vs. tokens

As mentioned, creating a token is much simpler than creating a coin. A coin requires you to develop and successfully maintain a blockchain. You could fork (create a copy) another existing chain, but this doesn't solve the problem of finding users and validators to help your network survive. Nevertheless, the potential for success with a new coin can be higher than just making a token. Here's a basic overview of the two options:



Runs on its own blockchain network

Can be built on existing blockchains with an established user base

Requires advanced blockchain knowledge and coding skills

Fairly simple to create with pre-existing tools and open-source code

Blockchain development is more costly and takes time

Token development is faster, simpler, and relatively cheap


Are you looking for